India must act now to prevent the country from losing $ 35 trillion in economic potential over the next 50 years due to unmitigated climate change, alerts a report from the Deloitte Economics Institute.
Titled “India’s turning point: How climate action can drive our economic future”, the report also reveals how the country could gain $ 11 trillion in economic value instead over the same period by limiting rising global temperatures and realising its potential to ‘export decarbonisation’ to the world.
With no action taken on climate change, the average global temperatures could rise by three degrees Celsius or more by the end of this century. It will make it harder for people to live and work as sea levels rise, crop yields fall, infrastructure is damaged, and other challenges emerge, threatening the progress and prosperity that the nation has enjoyed in recent decades.
Over the next 50 years, the top five most impacted industries in terms of economic activity are expected to incur a significant share of climate-related loss. These industries —services (government and private), manufacturing, retail and tourism, construction, and transport — currently account for more than 80% of India’s GDP. Together, they form the basis of the country’s contemporary economic engine. Deloitte estimates that by 2070, these five industries alone would experience an annual loss in the value-added to GDP of more than $1.5 trillion per year.
Atul Dhawan, Chairperson, Deloitte India, said, “We have a narrow window of time, the next ten years, to make the decisions needed to alter the trajectory of climate change. No one is immune to the impact of climate change, but for India, this is a window of opportunity to lead the way and show how climate action is not a narrative of cost but one of sustainable economic growth. As India aspires to be a $5 trillion economy, it is not just foreign and domestic investments that will be key in driving growth; we; we must also take this opportunity to align our ambitions with climate choices.”
Deloitte’s research also shows that if governments, businesses, and communities act boldly and rapidly in the next decade to address climate change, average global temperature rises can be limited to around 1.5 degrees Celcius by 2050 – a scenario that will minimise the impact of climate change for India and the rest of the world. At the same time, India can achieve significant economic growth by supplying the products, services, and financing the world will need to limit temperature increases.
Deloitte’s report sets out four critical stages for India’s climate transition. According to the Deloitte forecasts, economic benefits would be observed from the first year that bold climate policy decisions deliver rapid investment and technology development. In 2070 alone, this would equate to a GDP growth of 8.5%.
These start with the government and businesses making bold decisions to act on climate change and develop or expand their related strategies. Those decisions would see the economy start to decarbonise between now and 2030.
From 2030 to 2040, India and the world need to complete significant and coordinated shifts to reduce carbon emissions by tackling how energy is produced and consumed.
2040 to 2055 is the turning point, where the world avoids locking in temperature increases of three degrees Celsius or more. By this period, the process of decarbonising high-emission industries would be almost complete, the cost of green solutions would start to fall, and wider net economic gains would begin to emerge.
After 2055, India’s economy would have been radically transformed and be producing near-zero-emissions. As a result, there would have been a rapid gain in economic dividends from global decarbonisation, while global temperature rises would have been limited to reaching a maximum of 1.5 degrees Celsius by the end of the century.
NB: Photo is representational.